Digital transformation in 2026: Build, buy or assemble?

Technology leaders have lost more than a few good nights’ sleep weighing the complexities and trade-offs of the classic build-or-buy dilemma.

But as we enter 2026, the insurance industry is at a critical inflection point. The decisions insurers make now, whether to build, buy, or take a third path by assembling modular solutions and partnering with agile platforms, will shape their ability to compete and grow market share.

Innovation, agility and adaptability are no longer aspirations; they are the new global benchmarks. A clear divide is growing between insurers leaning into this challenge, becoming faster and more agile, and those stuck in the inertia of existing systems and years-long build projects.

To thrive, you must accelerate product performance, transform customer experiences, and develop the capacity for the ‘fast pivot’. No one can predict what’s coming next: climate change, regulatory shifts, market disruptions, or the sheer pace of technological evolution. The winners will be those who act decisively now.

The spectrum of choices

At one end of the spectrum, building gives some level of control, customization, and the chance to create something differentiated. But it demands absolute focus, discipline, and capabilities that many insurers do not naturally possess. On the other end, buying offers speed, scalability, and the opportunity to tap into proven functionality, but it may limit flexibility and create questions if the vendor doesn’t quite tick off all the needs. Increasingly, the most strategic players are exploring a hybrid approach: assemble the right components to strike a balance between agility and strategic differentiation.

Key decision-making factors

Strategic differentiation. Leading consulting firms, Deloitte, EY, Bain, McKinsey, PwC, rarely recommend building a core policy administration platform. Instead, they emphasize assembling the components that underpin your unique value proposition: digital ecosystems, pricing innovation, data and insights.
Time-to-value. How quickly do you need to launch or adapt? This doesn’t mean building everything from scratch. It means building the right things: the differentiators such as customer experience and data ingestion tooling, while buying robust, interoperable core systems.
Organizational readiness. Do you have the talent, culture, and governance to sustain a build? If any of these are misaligned, the decision becomes a liability rather than a lever.

Three modernization-strategy principles

Be smart: Identify the capabilities that will deliver strategic differentiation in the future.
Be brave: Recognize what’s working — and what’s not.
Be focused: Build or partner to assemble the components core to your value proposition.

Markets won’t wait for you to make these choices. This is what is meant by a critical inflection point.

Challenging the build route

With respect to insurers who prefer to build, ask yourself: are you comfortable waiting two years to gain the agility your business needs? A lengthy build isn’t just a development risk; it’s a risk of missed opportunity. Two years means unmet customer demands, competitors pivoting faster, and compounding opportunity costs. Even post-launch, you face cycles of customization, perpetual updates, and technical debt.

Buying for strategic value

Let’s ground this in reality with the insurers we collaborate with at INSTANDA. Success is measured in terms of time to value (growth) and delivering personalized customer experiences. Customers do not care if their journey is powered by proprietary systems or composite solutions assembled from the best partners and platforms. They care about the overall experience: tailored coverage, instant digital access, fair pricing, and feeling valued at every step. That’s the real market opportunity that buying — or assembling — empowers you to capture.

Customer expectations accelerate the shift

A survey of 2,000 consumers in North America and the UK reveals that more than half of insurance customers report neutral or negative feelings toward their insurer. The message is clear: there is immense unmet need. What could change this perception?

Slicker, faster claims experience (26%)
Self-service policy changes (23%)
More personalized services (18%)

Younger generations set the bar even higher, they demand digital-first experiences and seamless interactions across every touchpoint, mirroring the best of what they experience elsewhere.

Top CX trends for 2026

It follows that speed, simplicity, clarity, and greater choice will top customers’ wish lists in 2026. To exceed these expectations, insurers must act boldly:

Hyper-personalization. Design customer-centric products and journeys that simplify decision-making and provide transparency. Address customer pain points such as unclear policy terms and pricing (cited by a quarter of customers) by reducing data silos and leveraging unified technology to deliver seamless, customer experiences.
Customer-focused AI. Use AI to make service not only empathetic but fast. Automate away delays in quoting and policy issuance and embed AI into your policy administration and underwriting for a frictionless customer experience.
Seamless channel integration. Customers want the right service in the right channel at the right time. They want to be able to move seamlessly across channels

To get a quote online, seek live agent assistance or finalize a transaction via their mobile device. Context must travel with them so there’s no need to start over.

How to win the new game

The good news is that you no longer need to build everything. The technology, connectivity, and expertise you need exist. So where do you start?

1. Build your decision principles and factors. Define the principles and criteria. A structured approach will ensure decisions are intentional, not reactive.

2. Move beyond rip-and-replace. Harness modern API ecosystems to layer agility into your technology landscape, protecting core value while enabling rapid deployment of next-generation functionality.

3. Work with proven partners. Choose partners with a global track-record for delivering exceptional agility, whether that’s optimizing product performance, scaling existing portfolios, or transforming pricing and coverage capabilities.

4. Prioritize configurability and control. Choose platforms that offer full configurability and avoid rigid, vendor-controlled systems. Advanced no-code platforms with embedded AI empower your teams to design and adapt products quickly, delivering differentiated experiences and accelerating time-to-market.

5. Scale with intelligence, not intensity. Use repeatable products, processes, and models to enable flexible expansion across channels, markets, and regions.

Closing thoughts: Opportunity favors the agile

No one has a crystal ball, but the path forward is clear. Insurers that embrace agility, powered by thoughtful technology choices and genuine customer obsession, will be the winners of 2026 and beyond. Don’t let old paradigms keep you on the sidelines. Seize this inflection point, let customer experience direct your strategy, and position your business to claim the opportunities others will miss.

Derek Hill is group Chief Revenue Officer and Co-founder at INSTANDA. He can be reached by sending an email to Derek.Hill@INSTANDA.com.

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